Pre-Opening Wheat Market Report for 4/19/2010

July wheat was 3 1/4 cents lower overnight. The dollar rally and weakness in other commodity markets helped to pressure.

July wheat continues to push higher and moved to the highest level since March 22nd on Friday but is seeing general selling pressures overnight on speculative long liquidation selling. Open interest is coming down in the past week and this could be a sign of some short-covering from fund traders who have recently held near record net short positions in wheat. Extremely heavy rains in the southern Plains may have provided support to the wheat market with some fields there already at the saturation point in Texas. Too much rain is normally not a supportive force for wheat at this time of the year but there were some flooding and disease concerns with the last system. The Commitments of Traders Futures and Options report as of April 13th showed some light short-covering from fund traders who are just coming off of a record net short just a few weeks ago. Non-commercial traders were net short 44,879 contracts, a decrease of 4,432 contracts. Non-commercial and non-reportable combined traders held a net short position of 65,706 contracts, down 4,983 contracts for the week. The CIT Supplement report showed commodity index traders held a net long position of 222,114 contracts, up 1,990 contracts for the week. Bangladesh is importing 300,000 tonnes of wheat from Russia. Traders see the strong dollar as another reason to suspect that US exporters will run into stiff competition ahead. While much of the crop is already harvested, traders see the heat wave in India as a reason to suspect some losses. Australian producers are waiting for another rain to get their crop planted on time but the forecast is for dry weather this week. Traders see this afternoon’s weekly crop updates showing a slight deterioration in the winter wheat crop in the US but condition rankings are still very high and traders suspect high yields at this point. Iran plans to export 2 million tonnes to 3 Arab countries in May